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Sally Hunt slams profit motive in higher education at HE Festival debate

29 June 2017 | last updated: 30 June 2017

Speaking at the HE Festival today, UCU general secretary Sally Hunt argued that for-profit education is bad for students, higher education and the taxpayer. In a debate organised by the Higher Education Policy Institute, Sally and Million+ CEO Pam Tatlow argued against former British American Tobacco executive and now managing director of the Institute for Contemporary Music Performance, Paul Kirkham, and new boss of BPP University, Richard Simmons .

Sally cited appalling examples of for-profits' failings from America, including at BPP University's sister institution, the University of Phoenix, where the graduation rate for its online programmes is just 4 percent. Around 25 percent of University of Phoenix students default on their loans within three years of leaving school. The University of Phoenix spends nearly three times as much on marketing as it does on teaching.

She concluded by pointing to the failings of some for-profit colleges closer to home, exposed by the Guardian, and warned that we must not allow those circling our higher education sector purely to cream off profit must not be allowed to exploit our higher education system, our students or the taxpayer.

 

THE FULL SPEECH

Good morning

We, on this side, will show today that for-profit education is both inefficient and ineffective.

We will argue not just that for profit education is bad for students - which it is. Not just that for profit education is bad for higher education itself - which it is. But that for-profit education is bad value for the taxpayer too.

I have no doubt of the commitment my opponents on the other side have for their institutions. But when the motive is profit, it is profit that is the motive. And that is as true in higher education as it was in Paul's former life as a senior manager in British American Tobacco.

Now, we say that the existence of profit in education is negative for students. And the evidence overwhelmingly supports us. In the US, where these providers have entrenched themselves over the past decades, for-profit colleges charge twice as much yet devote less than a third of what public universities spend on educating their students.

Little wonder that according to the National Center for Education Statistics only one in five students graduates from a for-profit college in the US compared to more than 50% in public universities. In fact although for-profit colleges enrol about just 10 per cent of the US's college population, they account for nearly 45 per cent of all students who defaulted on their loans.

Now I know Richard from BPP is going to speak soon so I thought I would let you have a couple of facts about BPP's sister institution the University of Phoenix. Department of Education data from the US has shown that the University of Phoenix's graduation rate for first-time, full-time students is about 16 percent - even worse than the US for-profits' average.

Meanwhile the graduation rate for the school's online programmes is just 4 percent. Around 25 percent of University of Phoenix students default on their loans within three years of leaving school.  

Now these awful attainment rates are no surprise once you understand that the University of Phoenix spends nearly three times as much on marketing as it does on teaching. Indeed at its height Phoenix was spending $400,000 a day on online adverts alone. Now of course Paul and Richard are here to tell us that - don't worry - that sort of thing couldn't happen here.

Well of course it did happen here back in 2014 with the so-called cashpoint college exposed by the Guardian where students were recruited off the streets, the money pocketed and then classrooms left empty.

As one student told the guardian at the time: "If you want to take the [student loan] money and not come in, they [the college] are getting paid, so they don't give a fuck." Now, the serious point here is that it is the business model of for-profit higher education which makes it so damaging for students.

How else can we explain what Richard's former colleague Katie Best, then of the BPP Business School, said when asked about pile 'em high, sell 'em cheap criticism: 'Actually I take the "BPP is a sausage factory" criticism as a compliment'. Now I wonder if she would have approved too of the predatory tactics used by the University of Phoenix some of which are so shameful it is almost an embarrassment to read them out but I will:

  • duping military veterans of their life savings
  • misleading potential students about the value of their qualifications
  • falsifying student achievement rates
  • encouraging students to re-enrol for a series of courses and saddling them with tens of thousands of dollars of debt.

Now, our opponents in this debate will no doubt tell us that students entered those institutions of their own free will. But we in this room know that the decision about higher education is often taken from a position of genuine ignorance both of the real value provided by a course, and of its long-term cost in terms of debt.

So, if for-profits are dangerous for students, what is their impact on the UK higher education sector itself? It has been said that the UK can claim to be second only to the US in only two things: Olympic medals and higher education.

And there is no doubt that - despite the best efforts of politicians - we are a major world power when it comes to our universities. Yet an expansion of for-profits risks all that. At a time when our public universities are facing cuts, every penny of taxpayers' money spent propping up for profit shareholders is wasted.

At a time when the eyes of the world are on the UK, post-Brexit, can we afford another cashpoint college scandal? And at a time when the idea of the university itself is under attack, do we need to misuse the name simply to appease shareholders?

Now because I am a diligent researcher I read something that Paul said recently about this thing called the profit motive. He said: 'The entrepreneurial drivers behind alternative providers are often complex. Like all entrepreneurs, we are driven by a range of motives such as: a desire to grow and increase market share; a desire to innovate and create 'cool' products; a desire to prove ourselves better, stronger, smarter; and a desire to create some form of personal legacy. And, yes, we are often driven by a desire to create wealth.'

To me that is admirably honest: the desire to prove yourself; to create something cool; perhaps even a statue... who knows and - yes - make a few quid while you are about it. And why not? After all it probably works in tobacco. In real estate. In widgets. Even in sausage factories.

But that to me is a recipe for giving free reign to those with big egos and bigger pockets. It is the road that leads to a UK division of the Trump University not - I would argue - to academic enlightenment.

Ladies and gentlemen the question we are asked to debate today has already been settled in the largest incubator in the world - the US. Trillions of pounds of student debt and billions of pounds of taxpayers' money have been spent. And the results are clear.

The losers were students, staff and the taxpayer who picked up the pieces. The winners were the marketing men, the big egos and of course the shareholders.

But of course, that couldn't happen here could it?

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